Mortgage

Survey: Mortgage applications fall as homeowners are dissuaded by high interest rates

According to the Mortgage Bankers Association’s Weekly Mortgage Applications Weekly Survey, which ended Nov. 4, the trend in mortgage applications was slightly downward.

According to the survey, the Market Composite Index fell 0.1% from one week ago on a seasonally adjusted basis. The Index fell 2% on an unadjusted basis in the same period.

The Refinance Index fell 4% from the week before and was 87% lower last week.

The seasonally adjusted Purchase Index rose 1% in the week before, while the unadjusted Purchase Index fell by 1%. This makes it 41% lower than last year.

Joel Kan, MBA Vice President, and Deputy Chief Economics stated that mortgage rates edged up last week after the Federal Reserve declared that short-term rates would continue to rise to combat high inflation.

Kan stated that the 30-year fixed rate was above 7% for the third week in a row, while most types of loans saw increases.

Kan said that although purchase applications rose for the first time in six weeks after falling, they remained near 2015 lows. This was because homebuyers were still left behind by rising rates and continuing economic uncertainty. “The index fell to its lowest level since August 2000, as refinances continued to decline.”

In addition, the survey found that the refinance portion of mortgage activity declined from 28.6% to 28.1% in a week and that the adjustable-rate mortgage part of activity increased to 12 percent of total applications.

The FHA’s share of total applications decreased slightly from 13.5% to 13.3% over the week. Meanwhile, the VA and USDA shares were stable at 10.3% and 0.5% respectively.

The average contract interest rate increased by most measures over the past week. However, the rate for 30-year fixed rates mortgages with jumbo loan amounts (greater than $647,000.200) saw a drop from 6.55% down to 6.5%. The effective rate fell while the loan-to-value ratio (LTV) loans with 80% loan-to-value (LTV), points rose from 0.70 to 0.78.

The average 30-year fixed rate mortgage interest rate with conforming loan balances of $647,200 or less increased from 7.06% and 7.14% to 7.14%. Points increased from 0.73 to 0.77. This includes the origination fee for loans with an 80% LTV ratio. The effective rate has also increased.

The average 30-year fixed rate mortgage interest rate backed by FHA rose to 6.86%, from 6.7%. Points increased from 1.18 to 1.37. This includes the origination fee of 80% LTV loans. The effective rate has also increased.

The average 15-year fixed rate mortgage interest rate increased to 6.4% from 6.37%. Points rose from 1.13 to 1.05 and included the origination fee of 80% LTV loans. The effective rate has also increased.

The average contract interest rate for 5/1ARMs rose to 5.87%, from 5.79%. Points also increased to 0.92, from 0.9 for 80% LTV loans. Also, the effective rate increased last week.

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